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High-Cost Rail – Part 164 Private financing? Don’t bet on it

It was fun reading SF Comicle journalist Rachel Swan try to put a happy face on the latest PR from the High-Speed Rail Authority.  As the Feds meander towards cancelling the latest $4 billion check, the latest CEO thinks private money may participate!  From the Chron

At a moment when California high-speed rail faces possible abandonment, the project’s new CEO sees a tantalizing lifeline: $1 billion annually from the state, supplemented by an infusion of private capital.  It’s a hopeful, perhaps heady proposition.

More like a head shop proposition, but she's trying

But when CEO Ian Choudri was appointed last August to run the High-Speed Rail Authority, an agency created to plan and oversee the train system, he refused to let rising costs or critics distract him. Instead, he latched onto the public-private financing gambit, convinced that it just might work.

Here's another guy looking to eat at the trough

“There are significant ways to monetize (and) commercialize long linear rights of way,” said Sia Kusha, senior vice president of Plenary Americas, a firm that specializes in public-private partnerships. Plenary has helped build metro rail systems, hospitals, freeway express lanes and a vast expansion of the UC Merced campus.

Although Kusha did not provide specific details about how to commercialize high-speed rail, others cited the fare box as a basic source of revenue. Beyond that, companies could develop real estate around stations or operate tunnels and charge for every train that rolls through. For businesses willing to engage in a little magical thinking, the opportunities seem boundless.

"A little magical thinking"?  Is that like being a little pregnant?  You can tell Rachel had a deadline, went to the conference where this nonsense was discussed and had nothing else to write about.  The sooner Newsom kills this boondoggle and redirects the $1 billion per year of Cap and Trade money to things like, say, the Broadway grade separation, Caltrain and SamTrans budgets, or even propping up BART, the better.  Nobody has said this, but there's a non-zero chance that the El Camino Real "Little Big Dig" might be seeing cost increases that threaten the project the same as the grade separation.  Even that would be a better use of money than the Train from Nowhere to Nowhere.

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7 responses to “High-Cost Rail – Part 164 Private financing? Don’t bet on it”

  1. Joe

    From the bottom of the article, this guy has been there:
    Other observers have doubts. Richard Tolmach, president of the California Rail Foundation, remembers how he tried steering a similar attempt to rally private money in 2010, only to see it unravel. Politicians, including the appointed members of the rail authority, needed financial aid but were largely unwilling to relinquish control over the railway design, or heed advice from industry leaders, Tolmach said.
    After watching companies approach the state time and again, only to have the talks go nowhere, Tolmach has little faith that anything will change.
    “A billion dollars a year will mummify the project in its current condition,” he said. “They will lay a piece of track here, a piece of track there, get little pieces started but not operating.” From his perspective, any notion of profiting from high-speed rail seems far-fetched.
    ———————
    “mummify”. I like that.

  2. Gavinius Caesar

    I, Gavinius Caesar, have returned from my emperor journey to South Carolina. I will be sending carrier pigeon messages to my wealthy friends and tribunes for funds to advance the Roman railway another 300 Roman feet.

  3. Joe

    Check this out from the OC Register–$156M per mile!
    California’s bullet train may be the state’s most high-profile transportation money-sink, consuming a projected $135 billion with no clear path to the finish line. However, taxpayers shouldn’t overlook the other transit boondoggles torching public funds. Chief among them is Orange County’s 4.15-mile OC Streetcar: proof that you can pour high-speed-rail-style money into a monument to tunnel vision.
    Because the OC Streetcar was funded partly by Orange County’s Measure M2 (OC Go) half-cent sales tax, it placed an extra burden on local taxpayers. And every future overrun will be 100 percent funded by local money. The Grand Jury report warns that the Measure M fund is already overextended with its project list adding up to 104.5 percent of revenue allocations.
    And while Covid-19 has been a convenient excuse, the report is highly critical of Orange County Transportation Authority’s (OCTA) failure to anticipate issues like contaminated soil, Native American remains, and aging utilities that have contributed to delays and cost overruns.
    The streetcar line from Santa Ana to Garden Grove was sold as a transformative link to connect neighborhoods, employment hubs, and transit centers. Yet as the project moves toward its delayed 2026 opening, its ballooning costs, questionable utility, and adverse impact on local businesses make it a case study in bureaucratic mismanagement and fiscal irresponsibility.
    Last month, the 2024-25 Orange County Grand Jury report released its scathing assessment of the OC Streetcar project’s operational and financial mismanagement. Initially projected to cost $250 million in 2015, the project cost has now reached $649 million, a 2.6-fold increase that could climb even further. That’s a staggering $156 million per mile, almost twice the cost of the next highest streetcar project: the (Washington) DC Streetcar at $83 million.

  4. Joe

    A new report shows that the sky is highly likely to continue to appear blue. And in other news:
    California high speed rail: Central Valley line alone won’t be profitable. Building to Gilroy could be
    A new report shows the Central Valley line is unlikely to pay for itself. Officials are weighing more expensive extensions to reach population centers
    A new report released Friday by the California High-Speed Rail Authority warns that the scaled-down Central Valley segment — the only portion of the line currently under construction — is unlikely to be profitable when trains begin running, as early as 2032. The report projects that revenue will cover only 45% to 74% of operating costs.
    The 96-page report lays out four different alternatives to extend the line as far north as Gilroy, where it could connect to Caltrain, and south to Palmdale, where it could connect with MetroLink to Los Angeles. Some of the alternatives propose cutting the 33-mile link north to Merced, heading west to Gilroy straight from Madera to save money. Merced would still connect to Madera via the existing San Joaquins Amtrak line with terminuses in Sacramento and Oakland.
    ——————————-
    Sure, sure. Change the route now. What could go wrong?
    Stop the bleeding now before the patient dies!

  5. Phinancier

    Why do they do stuff like this on our dollars??? And they are so proud of it.
    SELMA, Calif. – The California High-Speed Rail Authority (Authority) celebrated 16 new graduates of the Central Valley Training Center (CVTC) in Selma. With this graduating class, the CVTC has surpassed a major milestone – delivering more than 100,000 hours of training to students pursuing careers in the construction trades.

  6. Joe

    Somebody should explain to Rob Bonta that the “historic public works project” in the Central Valley is only historic in the amount of money that has been and would be wasted if we don’t kill the beast. From the Chron:

    Last week, the state’s High-Speed Rail Authority filed a motion for a preliminary injunction to prevent the U.S. Department of Transportation and Federal Railroad Administration from reallocating $4 billion in grant funds that Transportation Secretary Sean Duffy had frozen from high-speed rail. A hearing on the matter is set for Nov. 17 at a federal courthouse in Sacramento.

    Arguing that Duffy and Federal Railroad Administration Administrator Drew Feeley unlawfully stripped the $4 billion from an infrastructure project that has passed its compliance reviews, Attorney General Rob Bonta wrote in the filing that the two federal officials are now trying to shift some of that money — about $2.4 billion — to other pursuits.

    “If (the) defendants transfer the funds to other recipients before the Authority’s challenge to the grant terminations can be decided, the case will be moot, irreparably harming the Authority and dealing a severe blow to a historic public works project that promises to transform the Central Valley and the state’s transportation network,” Bonta wrote.

  7. Paloma Ave

    Brown and Newsome spending billions to buy union votes!

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